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Primary Agriculture Cooperative Societies (PACS) And Their Contribution To Sustainable Food Systems – IMPRI Impact And Policy Research Institute

Primary Agriculture Cooperative Societies (PACS) and their Contribution to Sustainable Food Systems

Dr. Parashram Patil

India’s population is growing at a faster rate. India overtakes China as the world’s most populous country. Presently, the Indian food system faces many challenges ranging from increasing pressure on natural resources (soils, water, air, forests) to climate change to fragmenting land holdings, increasing urbanization, and high rates of malnutrition amongst children. There is a need to find a solution to it otherwise an unsustainable food system will have a negative cascading effect on Indian society. Also, to address the food system, it needs institutional approach, existing systems like cooperatives may play a very significant role in addressing food system challenges. 

What is a sustainable food system  

Food and Agriculture Organization of the United Nations describes a sustainable food system  as a food system that delivers food security and nutrition for all in such a way that the economic, social and environmental bases to generate food security and nutrition for future generations are not compromised. 

Why cooperative societies are important in the Sustainable Food System

The cooperative movement has contributed significantly to the development of rural areas. The feeling of brotherhood and a tendency to work together has grown among the members of these societies. Moreover, a sense of real democracy is communicated among the people. It provides agricultural credits and funds where state and private sectors have not been able to do very much. It provides strategic inputs for the agricultural sector and they work at farm gate level.

A sustainable food system is a type of food system that provides healthy food to people and creates sustainable environmental, economic, and social systems that surround food.  Sustainable food systems start with the development of sustainable agricultural practices, development of more sustainable food distribution systems, creation of sustainable diets, and reduction of food waste throughout the system. Since cooperatives work at farm gate level they can contribute naturally in sustainable agriculture, food distribution, food waste and diets. Thus, we need to check out cooperative setup in the context of ensuring a sustainable food system. 

What is Primary Agriculture Cooperative Societies (PACS)

PACS are village level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level. PACS provide small farmers with access to credit, which they can use to purchase seeds, fertilizers, and other inputs for their farms. This helps them to improve their production and increase their income. India is largely a rural economy with 66 per cent of the country’s population living in rural areas, where the presence of PACS is significant. 

Initiatives of Govt of India

The Ministry of Co-operatives, Govt of India has taken various measures to promote cooperative economic development model for inclusive the development such as follows:

  • Computerization of PACS.
  • Model Bylaws for PACS.
  • PACS as Common Service Centers (CSC).
  • National Cooperative Database.
  • National Cooperative Policy.
  • Amendments to the MSCS Act, 2002.

A total financial assistance of Rs. 34,221 crores disbursed in the financial year 2021-22 for the various schemes of NCDC.

  • Member Lending Institutions in Credit Guarantee Fund Trust
  • Co-operative Societies as ‘Buyers’ on GeM Portal
  • Reduction in surcharge on co-operative societies
  • Minimum alternative tax deduction
  • Relief under Section 269ST of the IT Act
  • Reduction of tax rates for new co-operative societies
  • Increase in cash deposits and credit limits through PACS and PCARDBs.
  • Resolution of long pending problems of sugar cooperative factories.
  • New National Multi-State Cooperative Seed Society.
  • New National Multi-State Cooperative Organic Society.
  • New National Multi-State Cooperative Export Society.

Some of the major roles that PACS can address in terms of a sustainable food system.

Primary Agriculture Cooperative Societies (PACS) seamlessly combine economic, commercial, social and environmental functions that are key to building increasingly sustainable food systems and responding to the current consumer demand for more and better food, together with good production practices. Primary Agriculture Cooperative Societies (PACS) works at gross route level at farm gate with the small and marginal farmers.

Agriculture is the primary source of income and employment at millions of Indian villages. The traditional agricultural practices, lack of infrastructure, restricted credit to access financial institutions, and lack of market knowledge and limited resources are the basic characteristics of the Indian agricultural economy. Thus, Primary Agriculture Cooperative Societies (PACS) in India are playing a significant role in ensuring food security by helping individual farmers to enhance food output.  

  • In the food system farmers are the main actor.  PACS help farmers by giving them access to resources: Further PACS can help farmers in getting lower input cost than farmers do individually by pooling supply purchases, sales, and handling and selling expenditures. Farmers can be empowered through PACS so that he can contribute to the food system effectively. 
  • PACS must extend their role in connecting farmers to markets, providing a collective platform for negotiating with buyers, providing aggregating, marketing, and processing services, providing primary product distribution channels, and providing training, services such as business planning and capacity building. Thus, PACS can play a significant role in ensuring the product buyer supply chain for better value of crops. 
  • PACS must respond to environmental deterioration by conserving and managing accessible natural resources in a sustainable manner through its member farmers. 
  • For the safe food post-harvest storage and distribution of perishable commodities and food items, cold storage is essential. PACS must be empowered to develop cold storages at farm gate level. 

While working with member farmers PACS shall have greater vision, they need to go beyond its traditional role of giving just credit. Their member farmers’ wellbeing is associated with a sustainable food system, therefore PACS must act in these directions. They are also empowered by the government of India by adequate funds and capacity building to extend their role.

PACS shall contribute effectively in a following area to make Indian food system sustainable 

  • Promote good agriculture practices among member farmers to produce sufficient food efficiently with environmental sustainability.
  • Awareness among farmers, environment and climate change. 
  • Help in marketing food with low intermediation costs and low food losses.
  • Promote nutritious food and safety for consumers while ensuring remunerative prices to farmers.

Dr. Parashram Patil is Prime Ministers Museum & Library Fellow (PMML), Agriculture Economist, New Delhi

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organization.

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Acknowledgment: This article was posted by  Aasthaba Jadeja, a research intern at IMPRI

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